Thomas J. Stringer, Esq.

Tim Feemster

Managing Principal, Foremost Quality Logistics

The Site Selection Checklist: Prepare Your Approach

Regardless of which and how many factors make up the checklist, understanding these decision-drivers, their priority, and potential impact on the project will provide the foundation for the location analysis.

Brad Lindquist, Senior Managing Director, Newmark Knight Frank

Phil Schneider, President, Schneider Consulting, LLC

Nov 08

The success of a site selection program can be directly attributed to diligent project preparation, along with an objective, methodical, and detailed process for the location evaluation. Based on our experience drawn from working with clients of all sizes, industries, and functions, we have found that successful projects begin with a checklist of issues and factors, appropriately weighted and prioritized for the client's specific situation and needs - and the best checklists emanate from strong initial project planning and team organization.

Developing the project-specific plan and checklist is usually a relatively short step in relation to the full location evaluation process; yet, it has proven time and again to be among the most important determinates of overall project success.

Step 1: developing the location project foundationWithout a proper project foundation and plan - including an engaged team, appropriate resources, and an agreement on the project's guiding principles, decision drivers, specifications, and timeline - the proper execution of the site selection project will be threatened from day one.

Although corporate site selection projects can often emanate from a single issue (e.g., improve customer access, reduce operating costs, or solve a pressing space constraint), many other issues and factors will need to be prioritized and evaluated for the site selection project to be a long-term operating success. Therefore, prior to finalizing the project site selection checklist, to ensure that the process comprehensively reflects the client's long-term objectives and requirements, several preliminary questions should first be addressed:

Typical Location Decision Drivers

ACCESS

Markets or Customers

Raw Materials or Suppliers

VARIABLE OPERATING COSTS

Labor, Taxes, Logistics,

Utilities, Real Estate

WORK FORCE AVAILABILITY

Skilled, Technical,

Management, Expats

REGULATORY CLIMATE

SUPPORT INFRASTRUCTURE

Utilities, Transportation

REAL ESTATE

Have all key project objectives, guiding principles, criteria, and specifications been identified?As the saying goes, you will never get there if you don't know where you are going. Similarly, companies that launch their location projects without first establishing clear objectives, guidelines, specifications, and decision-drivers will still find plenty of candidate locations - they just won't have a good way of knowing whether they are the right ones.

Numerous surveys are conducted annually to rank the factors that drive site selection decisions. While different industries, companies, and corporate functions typically have unique and highly variable specifications and drivers, the factors listed in Figure 1 are common to most projects, regardless of industry. Whether the project has a global or domestic focus, understanding which factors are decision-drivers, their priority, and the potential impact they have on the project will provide the foundation for the location analysis.

Do the project manager and support team have a clear set of roles and responsibilities?As with any major corporate initiative, the information flow emanating from the location selection process can be immense. The primary project manager must take responsibility for information exchange and for communicating a clear and consistent message, both internal and external to the company. Given the vast number of issues and factors that must be evaluated across widely variable location candidates, identifying and engaging a project team consisting of members across all relevant corporate functions will ensure that project specifications, criteria, and operating impacts across the company's functional spectrum will be adequately considered. For example, even a location decision driven primarily by labor issues must still ensure that other operating issues (e.g., tax, supply chain, infrastructure) support long-term project objectives and requirements; if only HR team members are involved, other important operating issues may be overlooked.

Is there management consensus on the objectives and criteria that will drive the decision?At the beginning of corporate location projects, it is not uncommon for nearly every member of the internal location selection team to have differing views on the rank and priority of factors and criteria, and for functional heads to assume that the factors related to their area of responsibility are the most important factors and therefore should drive the project. Before detailed location screening and validation activities begin, the team must first reach consensus on primary project objectives and how the critical location decision factors in the checklist will be measured, scored, and weighted. Without consensus on the location evaluation structure, the process can quickly bog down in internal conflict. It is far better to have consensus on the criteria that will drive conclusions prior to the emergence of conclusions.

Are there an agreed project timeline and milestones?Another important initial step is to develop a project timeline that is realistic and meets company expectations, and that everyone understands the consequences and risks associated with missing the expected completion date.

While companies demand that projects reach conclusions at an ever-faster rate, the complexity of the global business environment constantly threatens delay. Whether the project has a hard-stop completion date (e.g., lease expiration, product delivery contracts), or simply a soft target for planning purposes, location project timing implications and milestones should be analyzed and agreed before project launch.

Brad Lindquist, Senior Managing Director, Newmark Knight Frank

Brad Lindquist joined Newmark Knight Frank Global Corporate Services' consulting practice in 2013, bringing broad strategic expertise across all asset types and capabilities global in scope. Areas of specialization include business location strategy, facility site selection, economic incentives negotiations, and real estate portfolio optimization.
Lindquist has over 17 years of experience assisting corporations and public agencies in aligning their business and facility implementation strategies with their corporate objectives and operations. Capabilities include domestic and international facility strategy, labor market evaluations, and incentives negotiations. He has provided consulting services to clients across a wide range of industries including advanced manufacturing, aerospace, alternative energy, automotive, financial and business services, food and beverage, life sciences, retail distribution, and others. Projects span the U.S. as well as on-the-ground assignments in Belgium, Canada, Costa Rica, France, Germany, Iceland, South Korea, Malaysia, Mexico, Netherlands, Russia, Singapore, Taiwan, and the United Kingdom.
Prior to joining Newmark Knight Frank Global Corporate Services, Lindquist was a senior manager with Deloitte Consulting LLP's strategy and operations practice based in Chicago. He has published numerous articles in Area Development and Chief Executive and is a regular presenter at foreign direct investment conferences and seminars. Lindquist earned his B.S. in Construction Engineering and Management from Purdue University - West Lafayette Indiana.

Phil Schneider, President, Schneider Consulting, LLC

Phil Schneider has 27 years of consulting experience, primarily in the field of corporate location strategy, site selection, incentives negotiation, and economic development. He spent seven years with PHH Fantus Consulting, followed by 18 years with Deloitte Consulting, the last 13 years as a partner. Currently Schneider is president of Schneider Consulting LLC, providing strategic advisory services in the fields of location strategy and economic development.
In his role as a partner with Deloitte Consulting in the Strategy and Operations Practice, Schneider led the Global Expansion Optimization (GEO) group, the corporate location strategy and site selection practice of Deloitte Consulting. He led more than 300 location strategy and site selection engagements, and has experience around the world, including on numerous projects in China, Southeast Asia, India, Western and Eastern Europe, Latin America, South Africa, Turkey, and the Middle East. His work cut across industries and corporate functions. Schneider also led numerous assignments for economic development and investment promotion agencies to help them form business attraction and retention strategies.
He holds bachelor’s and master’s degrees from the University of Wisconsin.